The present invention relates generally to verification systems and, more particularly, to a system and method for instantly verifying the presence of vehicle insurance coverage.
Insurance rates in many states are reaching astronomical proportions. This is due, in part, to the existence of uninsured motorists. The relationship that exists between the number of uninsured motorists and insurance rates is quite apparent. Simply put, increases in automobile insurance premiums lead to more people being unable to afford insurance, which results in an increase in the number of vehicles being operated by people who do not have insurance, which leads to increases in automobile insurance premiums. Today, millions of vehicles are operated each day throughout the United States by motorists who have not purchased automobile insurance. When an automobile accident is caused by one of these uninsured motorists, the uninsured motorist is forced to pay the resulting damages. More often than not, the uninsured motorist lacks the resources to pay the damages thereby forcing the insured motorist to pay out of pocket. As a result, insurance companies have developed an insurance plan, called "uninsured motorist coverage", in order to lessen insured motorists' out of pocket expenses. Today, uninsured motorist coverage alone costs insured motorists billions of dollars each year.
When a motorist purchases vehicle insurance from an insurance company, the insurance company generally issues the motorist one card for each person to be insured and one card for each vehicle insured. Once vehicle coverage is obtained, it is generally only verified during those rare instances in which the motorist is involved in an accident. In those states having mandatory vehicle insurance statutes, verification may also occur during stops for traffic violations.
One major problem with these types of insurance verification techniques is evident. It is well established that many insurance companies allow for insurance premiums to be paid in monthly installments. Insurance cards are issued after the first payment indicating that the motorist is insured for a certain period of time, generally 6 months. If, after the first payment, the motorist does not make any additional premium payments, the insurance coverage will no longer exist even though the motorist's insurance card indicates that the motorist is insured for an additional five months. The above-described verification techniques cannot detect this lapse in insurance coverage.
There exists a need for a system which reduces or eliminates the number of uninsured motorists. The ability to quickly and accurately determine the existence of a motorist's automobile insurance will aid in reducing the number of uninsured motorists.